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Who Is Really A Socialist?

Yves here. Although this post does a very helpful job of parsing out the critical ideas that travelers under the “socialist” banner may hold, a shortcoming is how Rosser treats the idea of “ownership” of production. The original Marxist construct developed when businessmen owned mills and workshops directly, as in they owned productive assets. This old-fashioned idea of direct control of physical assets doesn’t sit well with our modern world of corporate structures and the legal requirements associated with them, and the complex rights that businesses control and the many ways those rights can be encumbered or constrained.

Despite the fetishization of shareholder rights, in a corporation, equity is a residual claim. All other legal and financial commitments come first: paying your taxes, your debts, your leases, your licensing fees, your workers, your legal judgments, etc. The right to the cash flows can be further encumbered or restricted by regulation. Banks in the 1950s and 1960 were extensively regulated, including on product types and pricing, to the degree that bank profits (unless you made reckless loans or embezzled) were assured but constrained. Utilities in the bad old days had explicit profit limits.

A more mundane example are rent regulation in New York City. Tenants in rent regulated apartments have property rights. They cannot be denied a lease renewal if they are current on their rent payments. They can take a roommate without landlord approval. They can legally sublease 2 years out of 4 and the landlord cannot “unreasonably withhold” his consent. My landlord was not only surprisingly accommodating when I sublet my apartment two years running, but they agreed to let me sublet a third year even though they didn’t have to. Family member even have succession rights (although they are subject to certain restrictions, like living in the apartment with the prime tenant for a sufficient amount of time before that tenant moved or died).

These rights are so strong that many tenants in my building with rent-regulated apartments have made substantial renovations, including two who spent over $1 million.

This is a long winded way of saying that “ownership” isn’t as black and white as it seems, that governments can restrict private property rights via prohibitions, regulations, and explicit financial claims in addition to taxes, and are thus capable of exercising considerable influence and capturing a considerable portion of the economic value of the enterprise short of full ownership.

Update: 6:45 AM: I hope you can look past the moralizing and hand-wringing. I still think the effort to identify major socialist ideas is useful. And he ignores recent analyses that suggest the early central planning/central control system in the USSR was effective for the first ~15 years. What screwed it up was local apparatciks gaming the system to request more resources they needed, and set production goals with plenty of slack in. That meant the system went from making decisions based on pretty good (despite not being supposedly sacrosanct “market”) inputs to bad ones.

By Barkley Rosser, Professor of Economics at James Madison University in Harrisonburg, Virginia. Originally published at EconoSpeak

Here are some varieties of “socialism:” command socialism, market socialism, socialist market economy, social democracy, democratic socialism, right wing socialism, utopian socialism, corporate socialism, just plain vanilla socialism.  Here are some people who have claimed to be socialist, some of them selecting one or another of these types, but some just keeping it plain vanilla generic: Kim Jong-Un, Xi Jinping, Stefan Lofven, Nicolas Maduro, Bernie Sanders, Aexandria Ocasio-Cortez (AOC).  Who is really a socialist and can we make any sense of all this?

Among the strictly economic issues involved here, aside from the political ones, there are three that stick out prominently: ownership, allocation, and distribution.  The first may be the most important, or at least the most fundamentally traditionally classical: who owns the means of production? This is bottom line Marx and Engels, and they were unequivocal: socialism is state ownership of the means of production, even though in the “hiigher stage of socialism” generally labeled “pure communism,” the statte is supposed to “wither away.” Capitalism is private ownership of the means of production, although there are debates over some intermediate collective forms such as worker-owned collectives, something favored by anarchistic and utopian socialism and its offshoots and relatives.

Regarding allocation the issue is command versus market, wiith command in its socialist form coming from the state, although clearly a monopoly capitalist system may involve command coming from the large corporations, with this reaching an extreme form in coeporatism and classical fascism, sometimes called corporate socialism.  Needless to say, it is possible to have state ownership of the means of production, classical socialism, but some degree of markets dominating allocative decisions.

Then we have distribution.  In the Critique of the Gotha Program, Marx said the goal of communism was “from each acording to his ability, to each according to his need.”  Emphasizing if not precisely that at least a focus on minimizing poverty and supporting those in need as well as increasing the overall level of income and wealth equality is another element of many forms of socialism.  This focus has been especially strongly emphasized by social democracy and its relatives, although most forms of socialism have at least officially supported this, if not always in practice.

Regarding our list of socialisms, where do they stand on these three, adding in the big political issue of democracy and free rights versus dictatorship, well: command socialism involves as its name suggests both command in terms of allocation combined with state ownership of the means of production, with no clear outcome on distributional view.  Historically permanent command as a system has coincided fully with dictatorship, including when this occurs with capitalism as in fascism, especiallly in its German Nazi form, a nearly pure form of command capitalism. The classic  model of this form was the USSR under Stalin, with its leading current example being the Democratic Peoples’ Republic of Korea (DPRK), aka North Korea, which pretty much tells us what kind of socialist Kim Jong-Un is.

Market socialism combines state (or collective) ownership of the means of production with market forces driving allocation decisions.  The old example of this that also had that holdover from utopian socialism of workers’ management, was Tito’s not-so democratic Yugoslavia, which blew up, although its former provincce of Slovenia eventually was the highest real per capit income of all the former officially socialist nations.  According to Janos Kornai, market socialism, including his home of Hungary, suffered from the problem of the soft budget constraint, although we have seen that in many mostly market capitalist economies with rent seeking powerful corporations.

There is no clear difference between market socislism and the “socialist market economy,” but the Peoples’ Republic of China (PRC) has gone out of its way to officially label itself this latter term, perhaps due to the collapse of Yugoslavia.  Many, including the late Ronald Coase, claim China is really capitalist, but in fact while there is now much private ownership, state ownership remains very strong, and while there is no longer organized cental planning, command elements remain important, and the ownership situation is very complicated, with many firms having substantial while partial state ownership.  In principle this form could be democtatic, but it is not at all that in Xi’s current PRC, which has had a largely successful economic system for the  last four decades, despite high inequality and other problems. In any case, this is the system Xi Jinping is identified with.

Social democracy now is the form that emphasizes distributional equality and support for the poor over the ownership and alllocation elements.  This is now, most dramatically in the Nordic nations, although it has had a weaker version in Germany in the form of the social market economy.  The name “social democracy” comes from the now century and a half old German Social Democratic Party, within which at the end of the 19th century several of these forms debated with each other, although in the end what came out, inspired by the original “revisionist” Eduard Bernstein, was what we now call social democracy, which is indeed politically democratic and supporting an expansive welfare state, while not pushing either  state ownership or command.  Stefan Lofven is the current prime minister of Sweden and also leader of the Social Democratic Party of Sweden.  A welder and union leader, Lofven just managed to get reelected and form another government last month, although his new government is “moving to the center,” and while he is certainly a social democrat, he has also described himself as being a “right wing socialist,” and Sweden has pulled back somewhat from its strongly social democratic model over the last quarter of a century.

Which brings us to democratic socialism, currently highly faddish in the US given that both Bernie Sanders and AOC have identified themselves as followers of this ideology.  The problem is that of all the others mentioned, this one is the least well defined, and Bernie and AOC themselves seem to disagree.  Thus when pushed Bernie posed Denmark as his model, which is a leading example of social democracy, arguably more so even than Sweden now, although its current prime minister is not a Social Democrat (party) and argues that Denmark is “not socialist” (noting its lack of command state ownership).  But AOC has at times said that democratic socialism is not social democracy, while exactly what it is remaiins not well defined.

One source might be the platform of the Democratic Socialists of America (DSA), which AOC officially belongs to.  This supports a democratic and decentralized form that emphasizes worker control, if not clearly ownership, with this harking to utopian socialism, with an ultimate goal of state or some other form of collective ownership, but not in this document command. AOC herself has now pushed forward the Green New Deal, (GND) which should perhaps be labeled “Green Socialism,” yet another form.  I do not wish to get into a discusson in this post of the details of the GND, regarding which there has been some confusion (retracted FAQ versus 14 page Resolution) about which there remain some uncertainties. DSA has at times nodded to the British Labour Party, which after 1945 under Clement Atlee, both nationalized many industries while expanding the social safety net, while avoiding command central planning.  However, the GND seems to avoid nationalizations, while emphasizing a major expansion of rhe social safety net, along with some fairly strong command elements laregely tied to its Green environmental part, arguing that mere market forces will be insufficient to move the US economy off its current fossil fuel base soon enough.

Which brings us to generic socialism and the still not described Nicolas Maduro, President of Venezuela.  He is loudly describing himself a socialist, but what form, if any, is unclear. But his economy is the biggest current economic disaster on the planet, so his ongoing claims of being a socialist are damaging the label, as seen in the eagerness of conservatives to identify socialism with him and denounce people like Bernie and AOC and all the Dem prez candidates signing onto the GND even before they knew what was in it, with this exemplified by Trump ranting loudly on this theme during his SOTU.

Looking closely it seems that indeed Maduro and Chavez before him, who preferred labeling the system “Bolivarianismo” rathet than “socialism,” did carry out portions of various of the forms of socialism.  Many firms were narionalized, with currently the number of privately owned firms about half of what there were 20 years ago (when Chavez was elected), although many of those original firms have simply disappeared.  About 20% of farmland was nationalized, mostly large-scale latifundia, supposedly to be turned over to landless peasants.  But much of it has simply come to be uncultivated by anybody. In any case, there remain large portions of the economy privately owned, with still wealthy owners living in gated communities and not suffering.

Perhaps the most damaging of the socialist policies have been scattered efforts at command, not based on any central plan, especially using price control.  In agriculture this has been a complete disaster, especially once hyperinflation hit.  Food production has collapsed, and lack of food has driven 3 million out of the country, with many still behind having lost much weight.  OTOH, the regime is supposedly being green by emphasizing traditonal local crops. But this is not even a joke. Bolivarianismo’s main positive was its popular redistribution policy, which increased real incomes in poor areas, especially while Chavez was in power, borrowing from the social democracy model.

The problem here is that all of these things, even many oof them together, have been recently tried in neighboring nations, such as  Bolivia, without simialrly disastrous results. Somehow Venezuela has just completely blown apart, with reportedly 86% of the population now opposed to Maduro and people in the poor neighborhoods of Caracas who were the Chavismo base now out demonstrating in large numbers (and being violently suppressed) after Maduro got reelected in a clearly fraudulent election, with most of his neighbors calling for his removal.

I think two things not related specifically to socialism have played crucial roles here: corruption and hyperinflation.  The most important agent in the Venezuelan economy is the state-owned oil company, which was nationalized long before Chavez came to power.  But he, with Maduro made this worse later, fiirng the competent technocratic managers of that company and replacing them with political cronies, with the outcome being a serious decline in oil production, this in the nation with the world’s largest oil reserves.  Which leads to the other problem, massive corruption, with the incompetent cronies at the top of the state-owned oil company the worst.  The other killer item has been the hyperinflation, whose source I do not really know, although Venezuelan tax rates are lower than those in the US.  Certainly part of it is massive budget deficits, and as the MMT people note, they were borrowing from abroad.  I do not fully understand all involved in the hyperinflation, although that is not a standard phenomenon in a full-blown command socialist economy, but the hyperinflation has clearly been the final killer of the economy, collapsing support for Maduro. Apparently about a third of the population still supports “socialism,” while many of those people reject Maduro, claiming he has blown what Chavez implemented, which Maduro certainly has.

So, for a summary.  Command socialims a la the DPRK is an awful diasster, famine plus dictatorshiip.  Market socialism/socialist market economy a la China has been good at rapid economic growth and much else, although suffering many ills on the environment and income distribution, not to mention alo being dictatorial.  Social democracy a la Swden and Denmark has done as well as any economic system on the planet and is democractic and free, but has also suffered from various problems.  The “democratic socialsim” of certain American politicians remains poorly defined and is in danger of being tied to the disastrous and vaguer form of “socialism” happening in Venezuela, with the danger for US politics being that conservatives may actually succeed in tying this pooerly defined democratic socialism with the barely socialist disaster in Venezuela.

Personally, I wish that Maduro would stop calling himself a socialist. Then he should also resign and get lost for the good of his people ASAP, although I do not support overdone US efforts by sanctions or possible invasion to bring this about.  Let it be the Venezuelan people who remove him, however.

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74 comments

      1. Jonathan Holland Becnel

        Its kinda hard when he spends about double the space on Venezuela rather than say Denmark n Sweden, which are the ‘best examples’ of Socialism.

        That said, i appreciate the clear definitions of different kinds of Socialism.

      2. Science Officer Smirnoff

        Useful capsule* complementing Yves’ prefatory remarks—

        First, by disaggregating such supposedly unitary concepts as “property” into their functional parts, [Wesley] Hohfeld implicitly revealed how intricate and changeable a thing ownership really is. Thus, party A could retain nominal ownership of Tara, but give away to B the right to live on the land during A’s lifetime, to C the right to farm the land, to D the right to mine it, to E the right to use it as a right of way to reach E’s own property, and to F the right to inherit the estate in its entirety upon A’s death. Picking up where Hohfeld left off, his fellow Realists showed that even as nominal owner of an undivided interest in Tara, Scarlett’s rights to use her property as she wished and to prevent others from using it were encumbered by law in a variety of ways. She could not, for example, use her land for a variety of purposes that might harm her neighbors, nor could she prevent the state from taxing the value of her land to pay for public services. That one could, as a matter of customary legal practice in liberal societies, be the nominal owner of property and yet be stripped of many of the rights of economic value in that property does not prove that there are no essential rights that ought to come with ownership. But it does strongly suggest that it will be no easy matter to identify what they are. . .

        *from Barbara Fried’s review in Phil. & Public Affairs (apparently still freely available):
        https://law.stanford.edu/publications/left-libertariansim-a-review-essay/
        See pp 72-75

      3. Susan the Other

        There might not be “plain vanilla” socialism. Every country on earth practices some aspect of socialism. I personally think our more socialist politics made us powerful. What country that impoverishes its citizens is powerful? Every dictator buys off the people somehow. And to parse to absurdity, I also think capitalism is socialism in the same spirit – what capitalist country that impoverishes its citizens is powerful? We have more socialism for the rich because we want to maintain our military. I dunno. This is an interesting introduction to make us all think but, to summarize my disappointment, I think it has broken socialism down into various types of bureaucracies and what they can achieve for the social good. But it makes it all seem so banal. Everything is socialism. Or capitalism. And to say what I always say: it is banal because we now face a complete political reevaluation in view of climate change and overpopulation. Two items that were never on Marx’s list. The old rules of socialism and capitalism hardly differ now. But Rosser said something I do support and that is Green Socialism. Support politically because, newsflash, there is no definition for those mysterious “market forces” other than political choices. A comparison of all the variations of capitalism would be as disappointing as this essay but should really be done because the question really is: Socialism compared to what? Or what kind of capitalism. And how do we create and protect lasting value in the most inclusive and pragmatic way?

    1. Joegreen

      Much of the negatives of Bolivariansimo, China and Soviet Union, nothing of achiements e.g. elimination of extreme poverty, reduction in poverty, education and healthcare for the people. We get that Maduro is failing,nothing about the sanctions, financial controls and propaganda and infilitraian of his government that caused this failure.

      One mention of corporate socialism, no discussion?

  1. skippy

    I find the time line observed to edit a rather large data set of events which proceed opinions – here in lies the rub.

  2. PlutoniumKun

    It is useful to parse this out, but to a large extent I think it is futile because the word ‘socialist’ has become largely meaningless as a statement of policy, its more a statement of identity.

    Its even more confused as the left wing in most countries have particular flavours which are confusing and meaningless viewed from outside that culture and society. As a detailed analysis, the link last week to Perry Andersons fantastic overview of Brazil is a case in point – the article makes clear that despite being allies and life long socialists, Lula and Dilma Rousseff, had almost entirely contrasting beliefs and approaches when it came to implementing policies (in brief, Lula simply sought to give the poor money, Dilma sought deeper structural reforms, the former apparently being a lot more successful).

    In my own country, the left wing is almost entirely split down the middle on what is euphemistically called ‘the National Question’ – every shade of left from social democrat to hard left is split between those who supported an independent/united Ireland, and those who opposed this in the name of working class unity. In the UK, Brexit has split the left right down the middle.

    So what is a socialist? I prefer to see it as a process. If you reject the primacy of the market and property ownership as the central organising factors in the economy and instead favour strong democratic state control (not necessarily ownership) over the economy as being the vital tool in eliminating poverty and discrimination and ensuring a steady progress to compressing the gap between rich and poor, then in my book you are a socialist, even if you don’t call yourself that. Within that definition of course there is a vast area of potential disagreement.

    1. tegnost

      Thanks, very good points. Here in the u.s. I find those who complain most about socialism overlook their own reliance on it’s structural presence in our society

      1. rd

        Yes.

        I can only assume that the farmers railing against single payer health care socialism are also asking Congress to remove their crop subsidies as that is a redistribution of wealth through socialism.

        Although, I assume that subsidies, tax breaks, and reduced royalties for corporations aren’t really socialism as that transfers wealth form taxpayers to corporations, kind of the reverse of the complaints about socialism.

        1. Big River Bandido

          Those subsidies are so skewed toward Big Ag that the few “family farmers” remaining are cut out.

          Also, one should not assume that rural residents are against single-payer health care.

          1. Amfortas the hippie

            aye. we are not universally against such things,lol.
            the portion of homo ruralicus that is FOR such things is growing, albeit slowly(I’m doing my best).
            this bunch: https://farm.ewg.org/region.php?fips=48000&statename=Texas

            has a sort of granular, county level list of who got what and when…where I live, it’s only the big ranchers, now. 20 years ago, when the peanut subsidy was still here, it was much more diverse.
            increasingly, those who benefit from subsidies(again, in my county) are more ruthless, and less traditional farmer/ranchers…ie: they’re shamelessly gaming the system…much like the proverbial welfare queens of yore.
            I’m also noticing more LLC’s and shell type things on the local list(I check in periodically…especially after some local outburst about the lazy poor(increasingly rare, which might be an indicator))

    2. Ignacio

      I agree very much. This explains why it is so difficult for the left to win elections. As a sample my own vision of spanish politics. I haven’t voted the “socialist” PSOE party since 1982 because it turned too “centrist” or “third way” and these years I have been hopelessly voting the “true” left (Izquierda Unida, lately in coalition with Podemos), but I have become more reluctant to repeat because I dislike Podemos leader (Iglesias) while I still have sympathy for Garzón who is IU leader. IMO, the coalition is much worse as an alternative than IU as a distinct option. Current PSOE leader (Sánchez) is somehow less centrist. He resembles Zapatero (with real social concerns) but more practical so I think I will vote PSOE for the first time in many years.

      1. PlutoniumKun

        Yes, voting for ‘real life’ parties can make things even more complicated. Sometimes its reasonable to vote for competence, or strategically, rather than the party closest to your own beliefs.

      2. Mattski

        I have an interesting little book about how the CIA vetted Felipe Gonzalez in a Paris meeting all those years ago, when Carillo was thrust aside. There was going to be tremendous public fervor for real change after Franco, but they had to have some clear understanding before they would let a socialist into power. Part of the agreement was to keep the police and judiciary. . . . I noticed that Gonzalez was calling for intervention in Venezuela in the NY Times yesterday (“[N]o podemos fallarles a los venezolanos y debemos ayudarles a recuperar su democracia.”) . . . El Pais, so full of great writing when I first learned Spanish in the 1980s,* has taken the same route.

        *I guess that’s a long time ago!

    3. Matthew Kopka

      This is good. (Those [several recent] pieces of Anderson’s are highly recommended in the London Review are pretty great, btw). I have seen socialism described in historic rather than structural terms, and find this works best for me: in such a sense it might be described as the history and rich legacy of collective attempts to solve societal problems, the potential for future same. The author here conflates Marxism with socialism; Marxism is socialist, but socialism is–of course–not necessarily Marxist.

      Was just reading a description of MMT in the URPE journal and thinking about these issues. In the end I see MMT as potentially socialist, but absolutely reformist. Marxism insists that we have to restructure society and the way we own and produce. I think that’s probably true in an ecological sense, now, but don’t see us recognizing that or making it happen. So MMT looks like a strong avenue to lots of needed social change. But obviously it leaves the existing structure(s) largely in place, which means they can be seized once again, subverted, or overthrown, including by Central Bankers.

      I am a lifelong lefty, but I just don’t think we have any time. . . left. Before fascism, before multiple crashes, before resource exhaustion, entropy, and a changing climate do us in. I see someone like Sanders (with all his contradictions) and the enthusiasm he and people like AOC are arousing, as a likely last best chance. Coming in from the hot.

      EDIT: As a side note, I think Yves’ distinction between the first 15 years in Russia and what followed is critical, especially if we are looking for ideas and lessons. This would also hold for China before Mao went crazy, where amazing things happened in the first decade esp. (see Fanshen), and Venezuela, where the standard of living was lifted enormously in the first phases of Chavez’s leadership, and with much of the world watching and inspired. The poor countries still want a kind of delinking/new Bandung; damned hard, obviously. The U.S., whether Dems or Republicans are in power (see Honduras) has an utterly right-wing foreign policy decade in, decade out. It invades you or helps people overthrow you and takes your stuff.

      1. Amfortas the hippie

        yes. regarding the history.
        jacobin had a big series last year on the russian revolution, and it’s worth a look.
        but with all such things, it’s hard to tell what really happened/
        i think about cuba…i grew up with a shortwave radio…and listened to granma a lot.
        i’ve never known who to believe about just about their entire history since the revolution…i expect that i’d hafta actually go there.(i’ve met numerous anticastro cubans, but only one procastro…so i get a skewed personal view…and dont know the reasons behind it: have i met so few procastro people because they stay home?lol)
        the widespread usa/cia skulduggery throughout the world…wherever “soshulizm” reared it’s head…has totally confused things.
        i learned for the first time from the jacobin series that the “capitalist west” was behind the White Army…mucking up the works.
        would stalin have happened without that interference? Mao’s later craziness? the current mess in Venezuela?
        we’ve got more than an hundred years of intense and coordinated and relentless mindf&ck surrounding all things socialism/communism/anarchism/etc…to overcome.

        1. bruce wilder

          I think of Cuba, too, having visited two years ago.

          Most Cuban-Americans, if they opine, are very anti-Castro (a bit pointless given that Fidel is the honored dead now) and have strong narratives of elite corruption under the current regime. Cubans in Cuba tend to think the government is well-intentioned though somewhat inept, but not corrupt.

          I cannot help but think the emigration from Cuba to the U.S. in the 1960s rid Cuba of some of the worst people in that country. Of course, in the U.S., they became Republicans, natch. The people who stayed were apparently very relieved to see Batista go and considering what a murderous, thieving thug he was, that should not be surprising.

          The problem with socialism as a politics of policy is that it is poorly defined. If you are out of power, you only have to criticize. Being against Batista was not hard. (Well, it was hard for Eisenhower apparently; why he thought Meyer Lansky’s “business interests” needed U.S. protection will remain a mystery for the ages.) But, the Cubans under Fidel tried various “command” socialist initiatives. Some seemed to go well. Literacy rose dramatically in a very short time — even allowing for some exaggeration in the regime’s propaganda, it was a hugely successful mobilization of society with lasting consequences. Sugar, on the other hand. Fidel sent everyone out into the cane fields. It is remembered with surprising bitterness by the grandchildren of people involved — immiserating for lots of people and a complete catastrophe economically as the price of sugar crashed. The transportation sector presents an archaeology of past centralized transportation initiatives: generations of Chinese bicycles and lately high-tech Chinese tourbuses (“wawa” [guagua] for some reason in the local dialect??), various Soviet and Eastern European vehicles and so on back to the famous American cars from the 1950s.

          There was idealism in Cuba’s Revolution and the command re-allocation of resources from the military to health care and education was and remains very real and consequential. But, it did not make Cubans rich, even if it relieved extreme conditions. The country has always been resource-poor; its strategic location dominating the Caribbean has always been its principle asset.

          The deal with the Soviet Union seems to have worked reasonably well though the quality of Soviet aid was often questionable and the Russians are not popular in memory. Go to Havana and your hosts may well go out of their way and yours to show you the Russian Embassy — a huge compound with fortress walls topped with barbed wire! Russian diplomacy apparently. The fall of the Soviet Union resulted in actual famine, in which the society held together but everyone lost weight and rather a lot of weight.

          Cuba is still a command economy with a whole layer of middle-level distributors and small manufacturers and service firms “missing”. After the decision was made to turn to tourism to earn foreign exchange, it became customary for visitors to bring “gifts” for the locals. For a long time, this included soap especially in the personal care line and writing pens. The inability to produce decent soap was embarrassing enough that the government brought in an Italian firm that has opened a chain of modern soap stores — they are quite beautiful and quite a contrast to locally managed retail of which there is some.

          There are other examples of such capitalist ventures — a Spanish hotel chain that escapes U.S. financial sanctions has modern hotels across the island and in the major beach resorts. And, naturally Coca-Cola is everywhere as always. With a few exceptions, the locals are limited in their capitalist ventures to renting rooms in the home to the tourist and running restaurants out of a home converted for the purpose. Apparently, when the turn to tourism was authorized, programs to train people as servers and cooks and so on were instituted and there is a high level of service apparent in the best places — use your guidebook though; bad can be really, really bad. The quality of service comes with a strange uniformity, though, like there was only one instructor at the ur-school for wait staff.

          Cuba has one of the oldest rail networks in the world but it is in a state of extreme disrepair and getting around the island by public transit can be challenging. Tourist buses dead-heading back to base have to carry locals and that seems to be a mainstay of what passes for a system. I do not know from any personal observation but was told the basic logistics to feed and service Havana, the largest city, are strained and somewhat fragile.

          The government very grudgingly puts cellular service and public wifi in place, but the bandwidth sucks. The principal achievement of the black market is “the package”: basically you can go to the computer guy with a storefront at the corner, give him a usb drive and he will copy all the pirated Mexican, Spanish and American television and movies you can possibly watch in a month. No one seems to know how it gets into the country or how it is distributed internally, but the government has given up trying to stop it. So, your tour guide is likely well informed about “Game of Thrones”.

          I suppose to quiet discontent, everyone is given a taste of sugar from the tourist economy and its dollars. Cuba has two currencies, one of which shadows the U.S. dollar and is freely exchanged and the other is for socialist transactions, likely getting your salary from the government. I, personally, think two currencies probably makes managing the economy way easier, but most Cubans think it is stupid to have two currencies, one of which is nearly worthless. (Not entirely worthless though and I heard tales of people who showed up with wheelbarrows of the stuff to acquire property to start businesses when it was finally allowed; apparently if there is nothing to spend it on, saving it can be quite easy for some people.) But, tourism and two currencies turn the economy upside down in some respects with young men pedaling bicycle rickshaws in Trinidad making an income as great as medical doctors in Cuba’s justly admired medical-industrial complex. (Still take your own antibiotics and cold medicine with you; no drugs in drugstores that I could see.)

          The government gave up most its military and security establishment during the famine. It was judged unaffordable. But, there is still plenty of petty authoritarianism. You need a license or permit for almost anything that could be construed as economic and it might not be that easy to get. “New friends” who gave me an email address cautioned me against emailing a photo in an email, because they would have to go to the post office to download it and explain themselves.

          Ownership can be a big problem as the revolution in early days encouraged a lot of squatting in “abandoned” properties. In theory, people were supposed to pay rent to the state or approved cooperatives, but whether it happened or not . . .? Now in the core of the colonial cities, with their tourist potential, renovation and restoration on a large-scale is underway and confused property ownership can become an obstacle to be resolved contentiously.

          There was a huge baby boom immediately after the Revolution, but a baby bust during the famine and since. There are a lot of people in the fifties; not so many young people. There is a great culture, nurtured by socialist investments in education, but every thing outside the tourist centers (and even in the tourist establishments not run by foreigners) seems shabby and a tad desperate. Young Cubans often want to leave, which they can do though it apparently takes a lot of patience or luck to arrange. I visited a ballet company where there is almost no talent over the age of 27, because they all emigrate on the first international tour where they are featured dancers.

          When the true believers were still in charge, I think not-knowing what to do was a big handicap for the socialist planners, but fearing that things would get out of hand and the evils of capitalism would arise like a phoenix out of the ashes, if any freedom of enterprise was allowed, was every bit as much a problem. Distributed decision-making is tough to manage.

  3. philnc

    No, this is an important discussion to have. I think AOC’s mention of worker co-ops in her interview with Chuck Todd on Sunday’s MTP was as “orthodox” a statement of at least a plurality of the (very diverse) DSA. Maduro and other lingering state capitalists come from a tradition that sees the uniparty socialist state as the only means to effect change. That’s no accident. The Bolsheviks silenced the many dissenting voices who wanted to see ownership of factories and farms devolve to local workers. There was a rich tradition of different approaches by anarcho-socialists, rural soviets and democratic socialists who didn’t think centralized control by a “vanguard party” was a good idea. Of course we all know what happened, especially after the Western monarchist supporting countries (including the US) invaded. That gave Lenin everything he needed to crush his opposition as seditious, if not treasonous.

    1. Matthew Kopka

      I don’t know how familiar you really might be with what has happened in Venezuela, but I don’t find this accurate. The party under Chavez has hardly been monolithic; in fact, it was willing to let a “thousand flowers bloom,” as the old expression has it, did at the outset and does now. All kinds of amazing experiments–with women, gays, neighborhood associations, schools, music etc. popped up all over the country.

      The problem instead lay, in my view, with the goose that was laying the gold egg, oil, and with the concept that socialism–indeed, a kind of socialized capitalism–had to precede real revolution. (See the experience of Grenada in the same regard.) Chavez and Maduro let the rich keep getting richer, even as they thumbed their noses at them and undermined the project; once the price of oil plummeted. . .

      Despite the Cuban experiment (hardly monlithic, either, but much more “uniparty”) Venezuela has been utterly different, including in the kind of highly democratic process that went into the rewriting of the country’s constitution. These people won ELECTION AFTER ELECTION, it is very convenient to forget.

      Having said all these things, I am in some agreement with you–all kinds of experiments need to take place. A revolution is a damned hard thing to organize. It requires some authorization from the commanding heights, but a lot more of the changes we need need to come from decentralized activity, beginning with much of food production.

  4. oaf

    This brings out the point that one would do well to know platform details -the minutia; rather than just resonating with the name; or some vague descriptor…or tribal affiliation…
    …Thanks; Yves….

      1. jrs

        For who is somewhat important IF they have a track record to go by, good or bad. And always, always, follow the money (because anyone can say anything, but who is really calling their tune at the end of the day?).

  5. Aleric

    What he describes as ‘market socialism’ sounds more like ‘state capitalism’ to me. His definition of socialism seems more like that of a hostile cold-war era market fundamentalist than someone interested in exploring ideas. I think Black Socialists (on twitter) have been doing a lot of work defining what socialism means today, and I’d recommend anyone who is interested to follow them.

  6. Norb

    What needs more focus is the idea of human perfectibility. It seems socialists believe in the betterment of humankind while those supporting capitalist structures see humans as ultimately flawed and don’t bother to take any responsibility for the species other than to themselves and their direct interests. A millionaire engaged in charitable activities after a productive lifetime of wealth accumulation seems a contradiction in terms.

    How else to understand the vehemence in which supporters of capitalism undertake to destroy and undermine all vestiges of socialist societies. They want to control the world, not be a part of it. This is why they can’t stop or change direction.

    The authors last statement seems to be classic Marxist historical materialism-intended or not.

    1. Amfortas the hippie

      ^^”How else to understand the vehemence in which supporters of capitalism undertake to destroy and undermine all vestiges of socialist societies”^^
      that’s what led me to finally fully embrace small-s socialism…after decades of dancing all around it: it’s what the humans i hated most, themselves hated most.
      if they’ll spend so much, and shed that much blood, to prevent it from ever even being tried…it can’t be all bad.
      eat the rich.

  7. Adam1

    The man has no idea what he’s talking about. Yes, capitalism is about individuals with private ownership interests directing production and a government structure that supports private contract rights. Socialism is not specifically about state ownership of the means of production, hence he doesn’t understand, “in the “higher stage of socialism” generally labeled “pure communism,” the state is supposed to “wither away.””. Socialism fundamentally is about the society and workers directing production and the elimination of rents or unearned income and where not eliminatable they are accrued to the people and not to an individual or class. In its most literal and extreme form it usually results in the confiscation of all private property, but it’s not a requirement. In a pure socialist world private ownership of property has no useful meaning; society produces what it needs.

    With all that said, this biggest real world problem that socialism seems to have missed is the rents that accrue to persons of power (regardless of what they own or don’t own or what class they came from). As Yves mentioned the USSR in the 1920’s, 30’s and well into the 1950’s was growing at a rate that was sure to eventually outstrip the west, but eventually it got the disease of corruption – or rent extraction via power. But any society can fall to this disease, it’s not something that infects only socialist economies.

    1. georgieboy

      the USSR in the 1920’s, 30’s and well into the 1950’s was growing at a rate that was sure to eventually outstrip the west…

      hmmm, strong claims require strong evidence.

      separately, at what human cost? Ask the Ukrainians what they think of the 1930s. Ask around. These were the kind of small-holding family farmers Willie Nelson might have given concerts for. Was Soviet socialism agreed-upon by the populace or imposed upon them? Is starving to death roughly 1/4 of all Ukrainians on earth just part of the process? Is the process of attaining heaven on earth, be it socialist or capitalist or anarcho-syndicalist, important?

      Separately, readers interested in a non-anecdotal look at impact of Soviet socialism on nutrition, infant mortality, etc may want to read the 2006 paper by Elizabeth Brainerd, “Reassessing the Standard of Living in the Soviet Union: An Analysis Using Archival and Anthropometric Data.”

      Here is link: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.421.5579&rep=rep1&type=pdf

      1. Scylla

        I cannot speak to the growth claims (which to me, are nonsense anyway, as they do not discriminate between productive and un-productive economic activity, nor do they show who benefited from such activity), but the story we are commonly taught regarding the Holodomor seems to be somewhat dishonest and politically oriented. I think many here may find the following link very interesting and well worth the time they spend reading it. It seemed to be much more well sourced than anything else I have ever read on the topic.

        As far as nutrition/health are concerned-I dunno, it seems that an awful lot of people are not doing so well here in good’ole capitalist USA.

        The Holodomor Story

    2. PKMKII

      State ownership may be a factor in a socialist economy, but it is neither necessary (hence anarcho-socialism) nor definitive of state ownership. Most of the economy was controlled by the state under the Roman Empire, but no one outside the most obtuse libertarian would identify that economy as socialist. State ownership is a tool, not an economic system unto itself. Methinks he’s conflating the notion of public property, which merely means that property is not a commodity, with state ownership.

      On your second paragraph: that’s why I like to say that the modern American economy is, in a certain sense, much like the economy of the USSR. In both cases you have a small number of individuals controlling the overwhelming bulk of the economy. The difference is just that in America, the oligarchs are private, in the USSR they were public.

    3. Deplorado

      Indeed re corruption, also something Yves pointed out.
      I grew up in the Soviet bloc and even though I was young when “democracy” arrived, I have vivid memories of how life was before that, what the narrative was that was pushed on people (there were many good and sensible things as well but that should be addressed another time). I’ve been working now for many years in midsize Silicon Valley companies and observing closely US corporate and political narrative and practice – and have formed a deep conviction that the misuse and abuse of power/position, rent extraction at the functionary and executive level and the disregard for the common good while claiming to support it is of essentially the same character. Which disgusts me profoundly because, not knowing how things really work, I immigrated to the US believing this kind of bullshit simply did not exist here.

  8. Patrick

    In the US the rosy picture of Nordic economies is rarely examined in the context of how they fit into the geopolitical picture compared to countries like Venezuela. Chavez was open about his desire to use Venezuela’s vast oil reserves as a geopolitical weapon against US imperialism, which of course made him no friends in Washington. No such declaration has ever come from oil-rich social democracies like Norway (a founding member of NATO) and their sovereign wealth fund invests their oil money in some of the most oft-criticized US corporations, including the wall street landlords that popped up post-recession.

    That doesn’t mean that Venezuela is good and Norway is bad. Nothing is that simple. I know I’ve seen people use the excuse of imperialism to justify human rights abuses and other authoritarian/anti-democratic things and that’s not my goal. It just seems a little shallow to not at least consider these distinctions when comparing the relative success or failure of different kinds of socialism.

    1. turtle

      I really wish that he had discussed Norway. I was surprised to read the People’s Policy Project articles on how “socialist” the Nordic countries really are, despite their denials (they do seem to deny being socialist, perhaps for historical reasons, being close neighbors of the former USSR).

      Norway, for instance, has state ownership of 76% of non-home wealth according to their analysis, which is rather incredible and rarely discussed when the subject of socialism comes up and inevitably ends up (lately) in a debate about Venezuela. I imagine that this may have been discussed on NC before, but I haven’t seen it. I’m a relatively new reader, for the last couple of years or so.

  9. Darthbobber

    I’d question the command versus markets dichotomy he insists on returning to over and over again.

    Given that capitalist firms are run internally as dictatorships, and given that each operates through command structures to decide what, how, and how much to produce, and that most of their workers have no voice in any of that, markets is hiding a lot here. Yes, each ends up selling the eventual product on a market of sorts, though in many cases it’s a market with only a handful of competitors, who avoid price competition like the plague. But in its production and distribution each one operates with obsessive planning and with a command structure that would be that of an authoritarian government, if it admitted to being a private government.

    Why this would be seen as warmer and fuzzier than democratic public planning and governance is not intuitively obvious. It has largely a propaganda value.

    1. Paul Boisvert

      Darthbobber’s excellent point resonates with that of Yves re ownership vs. control, and with David (10:09)’s below, re socialism being various means towards the end of “people’s wants [being] satisfied in a non-exploitative fashion.” All these issues are really about the important word in “democratic socialism”, which is not the latter, but the former: democracy. We want to satisfy our needs in democratic fashion–otherwise those with illegitimate (undemocratically allocated or seized) political and economic power will exploit those without it. Power (command and control, of which legal “ownership” is merely one type) must be exercised to run a society, but only democratically.

      The article is mildly helpful as a list, but the point is to analyze the various systems as to how they embody (real, not nominal) democracy. So, capitalism won’t do (private ownership and control of the means of production isn’t democratic). Private ownership of land isn’t democratic (newly born folks find as they grow up that they have had no democratic say in who owns what land); so land has to be leased from the state, though often for long terms.

      Worker’s co-ops are locally democratic, one-worker one-vote as to how the company runs and distributes profit, so they will do just fine as a basic unit of economic activity–this is the main idea of Schweickhart’s ‘After Captialism’, which I highly recommend. [And yes, of course they can be corrupt, as can any form of democracy; so you have to work hard to eliminate corruption–there is no free lunch. But neither is there any other option to achieve justice and fairness in society.]

      Private banks are undemocratic, so ixnay on that. Publicly controlled banks that implement democratically chosen investment goals are the ticket. To the extent that some economic phenomena are more efficiently handled by large (democratically controlled) state entities, yes we want nationalization. Clearly not all are, so we want lots of decentralized and more local democratically run economic frameworks as well.

      Markets where individuals shop for finished goods are democratic–I can vote quite effectively whether I personally want to buy lemons or limes. But the prices charged have to have been democratically set to encompass externalities that affect all of society (like their carbon footprints), so there must be state regulation and sales tax-setting. Some natural variation in success of enterprises due to luck (not merit) is inevitable, so democratically set graduated income taxes will be needed. And of course, MMT will rule the land… :)

      So to evaluate various claimants to the mantle of socialism, the main criterion is clear: to what extent do they implement democracy in the political economy. Note as usual that this is not a panacea for all social ills–democracy is far from a perfect system…it’s just better than all the others…

    2. jrs

      If we actually want real socialism how much voice workers have in their work and how their work(place) is run and also who keeps the profits is THE essential issue. That’s what ownership of the means of production boils down to: ownership and control.

      Mind you mere social democracy would move in that direction of course (when unions are empowered by policy and there is a real safety net it tends to), and be a general improvement of course.

      1. Paul Boisvert

        Yes, the road to democratic socialism runs through social democracy, but socialists need to carefully parse which “reforms” of capitalism they support. There is a fairly simple rule in principle–support reforms that enhance democracy and are basically things you would have in (true) socialism as well. Avoid supporting those that merely treat the symptoms of the problem rather than the cause (capitalism’s unwarranted private power.)

        Some things obviously qualify for support–nationalized single payer health care, higher minimum wages, job guarantees, eliminating the electoral college, accurate carbon pricing, and many more. Others are debatable, and there is no single criterion for “how much” a reform must change before it’s supportable. Many are merely symptomatic–say, increasing a tax deduction for “charitable support”…there would be no charities in a just society, as people would have a right to what they now dole out as “favors”.

        The real problem with social democracy, even the Nordic types, is that far from being semi-perfectable (maybe reaching 85% of the goals we want in socialism, which might be close enough for horseshoes), the capitalist sector remains sufficiently robust to constantly work to erode democracy and slide the society backwards towards the right. This trend is clear in all the Nordic societies over the last several decades, though of course they remain much better than the US…so far.

  10. Ignacio

    Regarding agriculture on the capitalist realm I put my concerns on 1) sustainable practices (achievable by regulation) and 2) pricing power of agricultural producers against suppliers and downstream processers. The weakest point of modern producers is their low pricing power amongst the behemoths that supply seeds, fertilizers and pesticides (and well herbicides although I dislike those) and the very large distributors, processers, commercializers. A “socialist” economy should help agricultural producers organize in ways that put them in equal negotiating terms with those so they do not need to rely on subsidies, and provide them with public services helping with pest prevention and management. Seeds, IMO, should belong to the public realm because it is a mistake to have seed monopoly when genetic diversity is a desirable trait.

    An example of well organized agricultural producers migth be the Netherlands.

    1. Amfortas the hippie

      “The weakest point of modern producers is their low pricing power ”
      Yes!
      when i was a real organic/sustainable farmer, one of the few “trade rags” i subscribed to was acres usa.
      this is well before i studied any economics, so i can’t speak to how his “raw materials economics” would actually work(might go dig all that out of my library and revisit)…but charles walters was a big influence on my thinking about farming as it intersects with the rest of the world.
      https://www.acresusa.com/pages/our-history
      the rampant cheating of farmers, throughout history, and our seeming inability/unwillingness to address it, was his biggest beef.
      in all this ruminating about what shape we’d like the future to take, the food supply shouldn’t be neglected.
      enormous computerised and roboticised indoor aquaponics ain’t gonna cut it.
      for all our gee whiz, we’re still animals…and we hafta eat.
      know your farmer.

      1. drumlin woodchuckles

        I got Acres USA. I still do. It is more Mainstream Organic under Fred Walters’s leadership than it was under Charles Walters’s leadership. But it still runs some articles based on the parallel knowledge which was the mainstay and mission of Acres USA in the past. And the bookstore still makes available many of those parallel knowledge books.

        Two books that Charles Walters wrote about his understanding of American economic history and his economic understanding and theories are still available from the Acres USA bookstore.
        https://www.acresusa.com/collections/books-videos/products/unforgiven

        and
        https://www.acresusa.com/collections/books-videos/products/raw-materials-economics

        Acres USA only has 12,000 or so subscribers. If it had a million subscribers, its reach and power would be far greater. It could get more done, and so could those million subscribers.

  11. David

    The article is classic instance of confusing means with ends, and tactics with strategy; Socialism is not public ownership, managed capitalism, central planning etc. etc.: all these are mechanisms which have been put forward for achieving socialism, and which have been tried at different times under very different circumstances, but all with the same approximate goal in mind. Social democracy, for example, was based on the idea of a parliamentary road to socialism, where a better society would be created as the old ruling class gave up its power and privileges peacefully in the face of overwhelming public support for socialist principles. We know how that worked out.
    Socialism at its simplest is a social and economic system where peoples’ wants are satisfied in a non-exploitative fashion. There are lots of versions of that, but what they have in common is a radically simpler and more efficient economy where wants are provided for directly, instead of through the bizarre and wasteful mechanisms we have at the moment, which largely exist to make simple processes complex and expensive, enriching all sorts of rent-seekers in the process.

    1. Marc

      Very much agree. I’ve understood that the goal of socialism is to overcome the estrangement of workers from their daily activity , (Marx’s theory of alienation), caused by the capitalist mode of production. For example, there were many strategies and tactics used to abolish slavery, but they were united by their objection of property law being applied to humans. Socialists do and should have many strategies and tactics to eliminate worker alienation, but we should be united in the common goal of a non-exploitative mode of production.

    2. Katy

      Socialism at its simplest is a social and economic system where peoples’ wants are satisfied in a non-exploitative fashion. There are lots of versions of that, but what they have in common is a radically simpler and more efficient economy where wants are provided for directly, instead of through the bizarre and wasteful mechanisms we have at the moment, which largely exist to make simple processes complex and expensive, enriching all sorts of rent-seekers in the process.

      Yes! My frustration is when politicians–even Bernie and AOC–suggest a policy without answering some essential questions: (1) What is wrong right now? (2) What would it look like if the problem were fixed? (3) Is your policy going to fix the problem? (4) Is your policy going to create perverse unintended consequences?

      I think that the people who are critical of various forms of socialism are legitimate in their worries that we will end up with a version of socialism that doesn’t fix America’s problems, and creates perverse unintended consequences.

  12. chuck roast

    Both Rosser’s history and theory are half-cooked. Moreover, it would have been a standard courtesy to his readers if he had employed spell-check, but that is just a reflection of his apparent disdain for the various kinds of “socialist” soup.

    I live on an island with 60,000 souls. A multi-national corporation with an annual profit of $5.8 billion owns the utility that delivers natural gas to the island. During a recent vicious cold wave, that corporation failed in its responsibility to deliver gas to the general public. Thousands of people were disencumbered. Many pipes froze and infrastructure and property was damaged everywhere. A friend of mine, a gentle, well-loved member of the community had his business wiped out by leaking pipes.

    The exact cause of the gas-outage remains unclear. Perhaps its just serendipitous that the day the 7 month worker strike ended and the scabs went back to their holes, the outage occurred.

    My theory and practice of socialism would be that the three cities on the island condemn the gas company locally and take it by eminent domain. We would then have an actual “public utility”. A natural gas distribution system owned by and answerable to the citizens of the island and operated and staffed by locally responsible people. With apologies to Rosser, my kind of socialist soup is probably a bit too fine grained for his macro analysis.

    Of course there is at least one caveat…that Bolton and Abrams and their criminal gangs don’t respond with an economic embargo of the island and put the three Mayor Maduros and their flocks on the rack and in the thumbscrews at the same time.

  13. The Insider

    This is a useful discussion to have, simply because the word “socialism” has taken a whole lot of overtones that don’t belong to it. It has come to mean “anything but capitalism”, which it is not.

    The central point is ownership: who owns the means of production? In a socialist system, the state owns the means of production. That’s socialism. Anything else is, well, something else.

    The most important point in the discussion is in Yves’ intro in her discussion of claims. In modern societies, there is a big difference between de jure control and de facto control, and that has profound implications for questions of who controls what. (To his credit, this is something that Matt Levine at Bloomberg brings up on a regular basis.)

    In modern capitalist societies, the real owners are not the shareholders of publicly traded companies – it’s the management. The management make the decisions on how capital is allocated, and, most importantly, write their own paychecks. (The CEO has his pay set by the board, but there are a thousand and one tricks that CEOs use to stack the board with sycophants who will sign off on what the CEO thinks he’s worth.) The management are the senior partners who have effective ownership of the corporation – the shareholders are junior partners with residual claims.

    And that’s the problem with socialism.

    When the means of production are owned by the state, there is a corresponding layer of management who have effective ownership. The government bureaucrats who make the decisions on how capital is allocated are in the same position as corporate management, and will use their position for precisely the same purpose – to enrich themselves at the expense of society.

    Corruption is endemic to socialism. As long as humans behave in human ways, government bureaucrats with effective control over the means of production are going to put their own interests first. “More oversight” is the standard response, but the long history of socialist governments has shown that, not only will government bureaucrats use their power to enrich themselves, they will also use it to dismantle systems of oversight (in much the same way that corporate executives insulate themselves from the shareholders through rigging corporate boards).

    The reason capitalism has the potential to work is because it can broaden ownership – real ownership, not fake “you technically are part owner, but actually it’s someone in the halls of government who is making all the decisions” ownership. When there isn’t a small class of people – whether corporate executives or government bureaucrats – who can use the means of production to benefit themselves at the expense of the rest of society, there’s a chance that the people more broadly can use the means of production to benefit themselves.

    From that perspective, capitalism works better when ownership is widely distributed, and worse when it’s concentrated. It’s that problem that social democracy tries to solve – to keep a capitalist system in place, but ensure that ownership is being broadened as much as possible. It’s also why it’s profoundly unhelpful for people to classify social democratic systems as “socialist”, when they absolutely are not.

    (Worker-owned systems are another way of doing things apart from capitalism or socialism – but I don’t know that they’ve been seriously attempted in recent memory. A lot of modern societies claiming to be owned by the workers have really been socialist systems where the government owned everything and bureaucrats had the nicest houses, not the real deal. The closest corollary in modern society would be professional partnerships, which seem to work reasonably well.)

    1. Grebo

      It is not about ownership itself, it is about the control that ownership is usually assumed to give. Particularly control over the division of the surplus: how much is paid in wages versus how much is paid in profit.

      Worker owned enterprises are a kind of Socialism. State owned enterprises are a kind of Capitalism–if the workers have no control.

    2. jrs

      Worker co-ops are socialism. How successful is a matter for debate, I don’t think they have had wide scale success which is a caution I’d have (and I wish they were more successful and perhaps they would be if policy was changed to radically encourage them), but they are socialism. Capitalism is capitalist ownership of the means of production, not worker ownership.

      On another topic: Social democratic systems might be the solution if they weren’t already using more earths than there are. They aren’t worse than less social democratic systems in this, they are generally much better, but they may not be ENOUGH, we also need a steady state economy, with whatever degree of socialism that may imply.

    3. jrs

      Btw this was a good comment even if I seemed to disagree. Well I originally came to leftism by way of anarchism so I do note the anarcho-socialist tradition.

      But how much and what form of leftist society one wants IS an interesting question.

      But at this point I think the left in the U.S. is just pushing back against an absolute horror show (and I mean current capitalism which is unspeakably horrible, not Trump, though he’s his own little horror) and gets lost in that. So the DSA: backs leftist and social democratic candidates, supports unions and strikes, supports protests (although it’s not their main wheel which is properly candidates and worker movements), goes door to door for MFA etc. etc.. Anything to push left with all our might.

    4. Darthbobber

      Even if this were all true, it doesn’t differentiate socialism from capitalism. Is there an historically or presently existing capitalism to which corruption is not endemic?

      Do you think a large capitalist firms lacks “a layer of managers who have effective ownership? ”

      In developed capitalist societies, has the percentage of the populace who exercise that “real, not fake” ownership of firms been rising or falling for the last century and a half? Falling, unless you’re one of those who think I have “real, not fake” ownership of GM because my index fund holds maybe half a share, but would have a “fake, not real” ownership if it were socially owned and I had but one vote. In the early 20th century, the great bulk of the so-called middle classes were independent proprietors, farmers, and professionals.

      The portion of the first 2 categories in the population as a whole has done nothing but shrink since, and of the professional classes, which have grown, a larger percentage are working for hire. This is a trend throughout mature capitalism. “Real, not fake” ownership contracts. It does not expand.

      As to social democracy Vs. socialism, this depends on the time. Even Lenin’s faction continued to be called social democrats until after the revolution.

  14. NY Geezer

    Socialism is a very large tent on the left.
    It includes the wonderful social programs of FDR’s New Deal and LBJ’s Great Society. Very few oppose those.

    But it is running into resistance and will necessarily lose adherents because some new arrivals who have recently won elections in the US as socialist democrats are using their new powers to promote controversial middle eastern Muslim causes which in my view are totalitarian. These causes are the causes of centralized, dictatorial regimes which require complete subservience to a foreign state and its agenda and that State is not my friend. For now, Israel’s destruction is demanded. But, as they said in the 1930’s first they came for the Jews …..
    I supported Bernie Sanders in the last election and contributed to his campaign, but I am reassessing my support. Liberalism is evolving and the new thing is different.

  15. Pookah Harvey

    Richard Wolff, Marxian economist, defines socialism as the criticism of capitalism. Just as capitalism has evolved from small owner businesses to large corporate enterprises so has socialism evolved. Where socialists have taken political control different types of socialist experiments have shown different strengths and weaknesses as described above.

    State socialism centralizes power in the state where bureaucrats end up making the economic decisions for the workers. This usually does not end well.

    Social Democrats try to regulate the power that employers have over employees. This worked for a while but regulatory capture weakens that regime

    Wolff feels both of these approaches have missed an important point. For economic freedom workers should have a direct say in decisions of the how, what, why, and where of production and the dispersion of profits. He feels you can’t have real democracy and freedom if you have to spend 8 hours every day in an autocratic workplace. For a short discourse from Wolff:
    https://www.youtube.com/watch?v=wkd_DDQ63gI
    Wolff has many more in depth lectures on youtube.

  16. Wukchumni

    The New Zealand I first visited in the early 1980’s was a classic cradle to grave socialist country, with their cudgel being heavy import duties which were un-Taylor made for an economy based on austerity, as in don’t throw anything away or buy anything new, make do.

    It seemed as if ever if 8th car on the road was a 1958 Morris Minor, and the country closed down tight as a tick as far as retail hours were concerned.

  17. Barry

    I think we suffer from an impoverishment of language here that may be the result of an actual Newspeak-like project.

    What if ‘capitalism’ and ‘socialism’ (and ‘communism’ = ‘doubleplussocialism’) aren’t the only two economic systems?

    What if forcing every actual defacto and dejure economic framework into one of two boxes, or arguing about the degree to which it is in box one vs box two, keeps us from thinking of novel solutions, or making useful improvements to real economic systems?

    What if effectively having only two labels forces everyone to choose sides to avoid being accused of badthink?

  18. Susan the Other

    If we had an enlightened political accounting system like MMT all of this talk about justice and waste might evaporate and we could get down to the business of providing for everyone and living sustainably. Right now profiteering is the last refuge of the old capitalists. And even they are not happy with it. To their credit.

  19. MyLessThanPrimeBeef

    Socialism, definition.

    When we look up a word in the dictionary, often (or always), there are more than one defintion, and once in while, with completely opposite meanings.

    Not so rarely a particular defintion of a word evolved from the way people use it. That is, it means what most of the people understand it to mean, and it takes on that particular new defintion.

    “That dude is so bad.”

    Here, bad becomes good, or even excellent.

    (Or it also could mean that dude is really very bad…you have to look at the speaker’s face, the tone and the context to decipher that).

    The speed at which Trump rushed to use the word ‘socialism’ or ‘socialist’ seemed to suggest it was advantageous to him…or so he thought…

  20. Mattski

    I don’t know how familiar you really might be with what has happened in Venezuela, but I don’t find this accurate. The party under Chavez has hardly been monolithic; in fact, it was willing to let a “thousand flowers bloom,” as the old expression. All kinds of amazing experiments–with women, gays, neighborhood associations, schools, music etc. popped up all over the country.

    The problem instead lay, in my view, with the goose that was laying the gold egg, oil, and with the concept that socialism–indeed, a kind of socialized capitalism–had to precede real revolution. (See the experience of Grenada in the same regard.) Chavez and Maduro let the rich keep getting richer, even as they thumbed their noses at him and undermined the project; once the price of oil plummeted. . .

    Despite the Cuban experiment (hardly monlithic, either, but much more “uniparty”) Venezuela has been utterly different.

    Having said all these things, I am in some agreement with you–all kinds of experiments need to take place. A revolution is a damned hard thing to organize, and a lot more of the changes we need need to come from decentralized activity, beginning with much of food production.

  21. David the Commie

    Rosser is neither theoretically nor historically coherent in his views.

    The two basic concepts that count are the Marxist and the social-democratic.

    Marx was explicit: in economics, social ownership of the means of production, abolition of the market in labor-power, the planned economy; in politics, the lower initial form of communism, which he called socialism, the state is the dictatorship of the proletariat.

    Social democracy has a million meanings but always comes down to prioritization of human need over profit within the system of capitalism.

    If that has ever happened I have never heard of it.

    The history of communism includes the Soviet experience in the time of Lenin and Stalin. The Soviet people got the new society up and running on no prior experience at all, a titanic achievement. They also beat Hitler and the Nazis, at a cost of 25 to 27 million lives, for which they are done no honor.

    Rosser seems never to have heard of Mao Zedong. The Chinese people likewise achieved immense progress in his time.

    The giants were followed by the pipsqueaks Khrushchev and Deng, who restored capitalism. Ah, so what. The Soviet and Chinese people will restore communism soon enough, and for keeps.

    1. Yves Smith Post author

      To your second point, it has in Japan. Capitalism was all about creating employment, not profit. Entrepreneurs are revered for creating jobs, not getting rich. Companies were all heavily cross held, so profits didn’t mean much, as long as the company was profitable. Japanese banks operated on razor thin profits by Western standards. Ditto their ginormous and very powerful trading companies.

  22. Left in Wisconsin

    Socialism: any form of socio-economic organization in which the economy is run to benefit the society rather than the society being run to benefit the economy.

    Socialist critique of capitalism: capitalist socio-economic organization ignores real, fundamental class differences between owners of (substantial) capital and working people – i.e. the two have real, opposing interests not amenable to win-win solutions – and invariable consolidates the wealth of society, and the power attendant in that wealth, in the hands of the (relatively few) owners of (substantial) capital, who use it to oppose the interests and well-being of the (relatively many) working class.

    Everyone who says this is what socialism really means and not that is just blowing smoke. All the definitions are at least 100 years old and the world has changed a lot in the last 100 years. We need more socialist experimentation.

  23. homeroid

    I have struggled with this term for some years now. Socialism.
    Capitalism is not making us better as a humanity. I know we need a system that works for all. Our language does not fit, we need a new word to describe what filters greed.
    Then perhaps we could start a new system. Wonderful comments on this thread. Thanks all.

  24. Blue Pilgrim

    There are many variations of both systems, but for me, the bottom line is that socialism is a system to maximize the welfare of society while capitalism is to maximize the welfare of capitalists. Standing on one foot to explain the rest — details of the laws and profits — are all just commentary.

  25. Sound of the Suburbs

    The average American used to be the most prosperous in the world and this ensured they won the ideological battle against Communism.

    The US is the flagship of capitalism in the world and it doesn’t look too clever these days.

    China’s central planning looks much better than the US’s economic liberalism. Globalisation saw China become a superpower and the US go into decline, and China appears to be winning today’s ideological battle.

    How did they mess up so badly?

    They had moved to a very different form of capitalism.

    The need to get back to the basics.

    Income from dividends, rent, interest and capital gains overtook earned income in 1984 and it has become a rentier’s paradise. With the rentiers siphoning off so much there isn’t that much left for employees.

    There are three groups in capitalism; employers, employees and the rentiers.

    There are two productive groups and one parasitic group, the rentiers.

    “The interest of the landlords is always opposed to the interest of every other class in the community” Ricardo 1815 / Classical Economist

    Our man on free trade was part of the new capitalist class and the old landowning class were a huge problem with their rents that had to be paid both directly and through wages.

    Disposable income = wages – (taxes + the cost of living)

    Employees get less disposable income after the landlords rent has gone.
    Employers have to cover the landlord’s rents in wages, reducing profit.

    In Ricardo’s day employees always rented, he just means housing costs.

    The US has forgotten that small state, unregulated capitalism has existed before and should start thinking about why it is so different to their expectations today.

    The initial battles of capitalism were against the old money, idle rich who did so little and took so much.

    By the end of the 19th century they sort to use banks to create the money (capital) for investment in business and industry, so they weren’t reliant on the parasitic, rentier class for investment capital.

    Capitalism then becomes a mutually beneficial arrangement for the two productive classes.

    The employees do the work to generate the profits for employers.
    The employers pay the wages to allow employees to live a reasonable life.

    The parasitic, rentier class is relegated into obscurity.

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